By Sharon Bernstein
LOS ANGELES, May 23 (Reuters) – California unveiled prices
on Thursday that consumers will pay for a selection of health
plans offered through the state under the Affordable Care Act,
providing a glimpse into how health care reform may look as it
is rolled out across the nation.
Under the federal health care reform law, Californians who
do not get or cannot afford health insurance through their jobs
can buy coverage through an exchange, at a group rate negotiated
by state regulators.
The cost to a 40-year-old who needs coverage would vary from
about $40 to $300 per month for a mid-level plan, depending on
the person’s income. Some young adults, who are less expensive
to cover, could pay nothing, depending on how much they earn.
The prices in California, along with those announced in
Washington, Vermont and other states, show that premiums under
Obamacare can be more affordable than had previously been
thought. Consumer advocates welcomed the new exchange.
“It’s a revolutionary improvement to move from a broken
market where people are charged by how sick they are, to a
competitive market where people pay what they can afford, based
on a percentage of their income, on a sliding scale,” said
Anthony Wright, executive director of advocacy group Health
Access.
“Most consumers buying coverage in the individual market
will get financial help and see their premiums go down,” he
said.
The sweeping federal reform law known as Obamacare seeks to
extend health insurance to many of the 49 million Americans
without it, and alter how care is delivered so as to curb what
has been an inexorable rise in healthcare spending.
Congressional Republicans who oppose the law had warned that
high premiums would sink Obamacare as the uninsured would not be
able to afford coverage even with federal subsidies.
Even the modest rates announced Thursday do not really
signal that the program will work, said California Republican
Assemblyman Dan Logue.
“This is like a shell game to me,” said Logue, co-chair of
the assembly health committee, who predicted that taxes would go
up to pay for the subsidies, forcing other prices to rise.
“They’re not going to tell you that you’re going to pay for
it in your gas or your food or going to the show,” he said.
About a dozen states have set up these exchanges, or large
group plans, which are a key element of the massive national
health reform effort. Several have already released rates for
monthly premiums, and most say the cost will not go up as high
as skeptics had feared.
In California, a 40-year-old who makes less than four times
the federal poverty level – that is, $95,000 for a family of
four or $46,000 for an individual – would pay as little as $40
per month for a mid-level plan in which about 70 percent of
medical costs and all preventive care is covered. This excludes
additional costs to cover children or a spouse.
The same plan for a person who makes too much to qualify for
a subsidy would run about $300 per month on average, the state
said. In addition, the total amount consumers would have to pay
each year for co-payments and other out of pocket costs would be
limited to $6,350 or less, depending on income.
Patients could choose plans that offer lower co-pays if they
wished, but would pay higher premiums. In some cases,
particularly for low and moderate income workers in their 20s,
the premiums are free once a federal subsidy is factored in.
PLAN OPTIONS
The exchange will also offer what it calls platinum plans,
in which co-payments are very low or non-existent. These plans
would cost $500 for those who do not qualify for subsidies, but
as little as $300 per month for low-wage earners.
The biggest subsidies go to people who make less than 150
percent of the federal poverty level, or about $17,000 for a
single person.
Peter V. Lee, a longtime health advocate recruited by the
state to help set up and run its program, said costs had been
expected to skyrocket because the Affordable Care Act requires
health plans to offer more benefits and cover more people than
they might otherwise have done.
For example, the plans must cover people with or without
pre-existing conditions that would make their care more
expensive. The actuarial firm Millman had predicted a 30 percent
rise in the cost of monthly premiums for individuals in
California under the new exchange.
But Lee said that did not happen. While rates without
subsidies may be moderately higher for some consumers next year,
most will pay less, he said. The rates announced on Thursday
must still be approved by state regulators.
Democratic Congressman Henry Waxman, who backed the health
reform act, said the program would protect millions from
bankruptcy due to medical costs.
“Californians buying coverage on their own will now have
access to the same quality coverage that people get through
their employers at the same or lower rates,” he said.
California’s exchange will offer coverage from 13 insurers –
down from more than 30 that had applied to participate.
Among them are some of the biggest names, including Anthem
Blue Cross, Blue Shield and Kaiser Permanente. Coverage will
also be offered by some companies that had previously limited
their activity to the Medicare and Medicaid markets.
Paul Markovich, president of Blue Shield of California,
which is offering coverage under the plan, said that to keep
prices low, doctors and hospitals had lowered some of their
rates. Some insurers also agreed to limit profits, Lee said.
The policies vary in their provider networks, but Lee said
consumers would have access to about 80 percent of doctors in
the state, and some of its premier medical centers.
Consumers will be able to begin signing up on Oct. 1 for
plans that will go into effect in January. Next month, the
California exchange will reveal plans and prices for insurance
that small business owners can purchase for their employees.
(Additional reporting by Caroline Humer and David Morgan;
Editing by Cynthia Johnston and Richard Chang)
